United Fruit Company
Overview
 
It had a deep and long-lasting impact on the economic and political development of several Latin American countries. Critics often accused it of exploitative neocolonialism
Neocolonialism
Neocolonialism is the practice of using capitalism, globalization, and cultural forces to control a country in lieu of direct military or political control...

 and described it as the archetypal example of the influence of a multinational corporation on the internal politics of the banana republics (a term coined by O. Henry
O. Henry
O. Henry was the pen name of the American writer William Sydney Porter . O. Henry's short stories are well known for their wit, wordplay, warm characterization and clever twist endings.-Early life:...

). After a period of financial decline, United Fruit was merged with Eli M. Black
Eli M. Black
E. M. Black was a Jewish-American businessman who controlled the United Brands Company. His son, Leon Black, is a founding member of private equity firm Apollo Management.-Early life:...

's AMK in 1970 to become the United Brands Company.
Encyclopedia
It had a deep and long-lasting impact on the economic and political development of several Latin American countries. Critics often accused it of exploitative neocolonialism
Neocolonialism
Neocolonialism is the practice of using capitalism, globalization, and cultural forces to control a country in lieu of direct military or political control...

 and described it as the archetypal example of the influence of a multinational corporation on the internal politics of the banana republics (a term coined by O. Henry
O. Henry
O. Henry was the pen name of the American writer William Sydney Porter . O. Henry's short stories are well known for their wit, wordplay, warm characterization and clever twist endings.-Early life:...

). After a period of financial decline, United Fruit was merged with Eli M. Black
Eli M. Black
E. M. Black was a Jewish-American businessman who controlled the United Brands Company. His son, Leon Black, is a founding member of private equity firm Apollo Management.-Early life:...

's AMK in 1970 to become the United Brands Company. In 1984, Carl Lindner, Jr.
Carl Lindner, Jr.
Carl Henry Lindner, Jr. was a Cincinnati businessman and one of the world's richest people. According to the 2006 issue of Forbes Magazine's 400 list, Lindner was ranked 133 and was worth an estimated $2.3 billion...

 transformed United Brands into the present-day Chiquita Brands International
Chiquita Brands International
Chiquita Brands International Inc. is an American producer and distributor of bananas and other produce, under a variety of subsidiary brand names, collectively known as Chiquita. Other brands include Fresh Express salads, which it purchased from Performance Food Group in 2005...

.

Early history

In 1871, U.S. railroad entrepreneur Henry Meiggs
Henry Meiggs
Henry Meiggs , was a promoter/entrepreneur and railroad builder. He was born in Catskill, New York. He came to New York City in 1835 and began a lumber business, but was ruined by the Panic of 1837. He restarted his business, this time in Brooklyn, but again met with failure...

 signed a contract with the government of Costa Rica
Costa Rica
Costa Rica , officially the Republic of Costa Rica is a multilingual, multiethnic and multicultural country in Central America, bordered by Nicaragua to the north, Panama to the southeast, the Pacific Ocean to the west and the Caribbean Sea to the east....

 to build a railroad connecting the capital city of San José
San José, Costa Rica
San José is the capital and largest city of Costa Rica. Located in the Central Valley, San José is the seat of national government, the focal point of political and economic activity, and the major transportation hub of this Central American nation.Founded in 1738 by order of Cabildo de León, San...

 to the port of Limón
Limón
Puerto Limón, commonly known as Limón , is the capital city and main hub of Limón province, as well as of the cantón of Limón in Costa Rica. It has a population of about 60,000 , and is home to a thriving Afro-Caribbean community...

 in the Caribbean
Caribbean Sea
The Caribbean Sea is a sea of the Atlantic Ocean located in the tropics of the Western hemisphere. It is bounded by Mexico and Central America to the west and southwest, to the north by the Greater Antilles, and to the east by the Lesser Antilles....

. Meiggs was assisted in the project by his young nephew Minor C. Keith
Minor C. Keith
Minor Cooper Keith was a U.S. railroad, fruit, and shipping magnate whose business activities had a profound impact in Central America and in Colombia.- Early life :...

, who took over Meiggs's business concerns in Costa Rica after Meiggs's death in 1877. Because he was looking for cheap food to give to his workers, Keith began planting bananas along the train route in 1873. Once the railroad was complete,It did not take him too long to see the success of his idea, in part by paying his workers extremely low wages. The workers left when exposed to very low quality conditions. This was not exposed until years later.

When the Costa Rican government defaulted on its payments in 1882, Keith had to borrow £
Pound sterling
The pound sterling , commonly called the pound, is the official currency of the United Kingdom, its Crown Dependencies and the British Overseas Territories of South Georgia and the South Sandwich Islands, British Antarctic Territory and Tristan da Cunha. It is subdivided into 100 pence...

1.2 million from London banks and from private investors in order to continue the difficult engineering projectThe railroad was completed in 1890 but the flow of passengers proved insufficient to finance Keith's debt. On the other hand, the sale of bananas grown in his lands and transported first by train to Limón and then by ship to the United States proved very lucrative. Keith soon came to dominate the banana trade in Central America and along the Caribbean coast of Colombia
Colombia
Colombia, officially the Republic of Colombia , is a unitary constitutional republic comprising thirty-two departments. The country is located in northwestern South America, bordered to the east by Venezuela and Brazil; to the south by Ecuador and Peru; to the north by the Caribbean Sea; to the...

.

United Fruit (1899 - 1970)

In 1899, Keith lost $1.5 million when the New York City broker Hoadley and Co. went bankrupt. He then traveled to Boston, Massachusetts, to participate in the merger of his banana trading company, Tropical Trading and Transport Company,heme for the solution of the participants' cash flow problems and was in the process of implementing it. The merger formed the United Fruit Company, based in Boston, with Preston as president and Keith as vice-president. Palmer became a permanent member of the executive committee and for long periods of time the director. From a business point of view, Bradley Palmer was United Fruit. Preston brought to the partnership his plantations in the West Indies, a fleet of steamships, and his market in the U.S. Northeast. Keith brought his plantations and railroads in Central America and his market in the U.S. South and Southeast. At its founding, United Fruit was capitalized at $11,230,000. The company at Palmer's direction proceeded to buy or buy a share in 14 competitors, assuring them of 80% of the banana import business in the United States, then their main source of income. The company catapulted into financial success. Bradley Palmer overnight became a much-sought-after expert in business law, as well as a wealthy man. He later became a consultant to presidents and an adviser to congress.
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